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The Caribbean has some of the world’s highest energy costs – now is the time to transform the region’s energy market

November 14, 2013 by Chris Barton - Autor invitado 15 Comments


by Christopher Barton, Lumas Kendrick, and Malte Humpert

The high and volatile price of electricity is the most important issue in the energy sector. Electricity prices in the Caribbean are among the highest in the world, and they fluctuate greatly with the global price of oil. The primary cause of the high cost of electricity is that most Caribbean countries use diesel and heavy fuel oil for electricity generation. These fuels are expensive and their prices fluctuate greatly based on the global price of oil. The table below shows average tariffs for 2010, 2011, and 2012 for utilities in numerous countries. The table shows that Trinidad and Tobago and Suriname have the lowest average tariffs, followed by the Dominican Republic. The table shows that all other Caribbean countries have significantly higher average tariffs, at levels above US$0.30 per kilowatt/hour.

There is an inseparable linkage between the fiscal crisis confronting the Caribbean Region and the reality of paying some of the world’s highest per capita energy costs. The countries in the region are encumbered with the necessity of importing increasingly expensive oil products for transportation and electricity generation. Covering the ever-increasing cost of energy places enormous pressure on countries whose national budgets are already heavily indebted.  Thus, a new Caribbean energy future is needed. Caribbean leaders in the public and private sectors must focus on taking full advantage of the region’s wealth of renewable energy resources, maximizing energy efficiency, and adapting recent developments in natural gas technology and supply to transform the Caribbean’s energy market.

On December 5, the IDB is hosting a regional, ministerial-level energy conference in Washington, D.C. entitled, “The Caribbean’s Energy Future: A Pathway to Regional Fiscal Stability.”   The key objectives of this one-day event are to:  (1) provide a forum to examine the issues associated with the region’s high energy costs and associated impacts; (2) explore options for addressing this problem; and,  (3) set forth a roadmap that will assist the region in developing a cleaner, more cost effective, and sustainable energy matrix.

As an honest broker in the region, the IDB seeks to assist the Caribbean in making the necessary changes in policy coordination, financial structuring, and infrastructure transformation that will usher in this new energy future for the region. This conference is but one small yet crucial step in this transformational process.


Filed Under: Economy & Investment Tagged With: caribbean, conference, cost, electricity, energy, energy efficiency, fiscal, future, gas, oil, sustainable energy, tariff

Chris Barton

Reader Interactions

Comments

  1. Daryl Jackson says

    November 18, 2013 at 10:54 am

    if there was 1 MWh of electricity produced for every meeting held or 100+ page documents produced on energy, the Caribbean would be energy independent by now. The challenges, constraints and risks associated with a total reliance on oil for electricity generation are well documented and understood. Similarly, the opportunities and benefits that can be derived from moving to renewable energy technologies and greater energy efficiency are quite clear to most. What is lacking is an investment climate which recognizes these realities and promotes private sector risk taking and innovation. Presently much of what happens takes place at 10,000 feet and above with very little – or no – impact on the ground.

    Reply
  2. Alex Hillman says

    May 6, 2014 at 10:19 am

    I have been working in solar and wind for seven years in the U.S. We are looking at moving out efforts to the Caribbean, but I cannot tell from the figures you provided what the exact KwH costs are
    Where can I find a list? This would include distribution as well
    Thank you
    Alex Hillman

    Reply
    • kafiluddin says

      September 1, 2015 at 11:28 pm

      Hi Alex ,
      Can you contact me today or tomorrow?
      I am working to install more solar energy in Suriname
      within a couple of months !
      You have my email address; my cell # is +597 8903400
      Kindest regards
      Eric Kafiluddin
      01-09-2015

      Reply
  3. michelle says

    April 28, 2015 at 11:38 am

    I only read about past tariff rates. What are the current rates like for the Bahamas? Has the Bahamas been more accepting of PV in current months?

    Reply

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Caribbean Dev Trends

We provide unique and timely insights on the Caribbean and its political, social, and economic development. At the IDB, we strive to improve lives in the Caribbean by creating vibrant and resilient economies where people are safe, productive and happy.

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